[Industry/Securities] Geumyang Discloses Corporate Governance Report... The Current Status of "Deficits, Absence of Dividends, and Delisting Crisis"

On the 29th, Geumyang disclosed its corporate governance report. This report is intended to explain the company's governance structure, shareholder protection policies, and board of directors' operations, but it served as an opportunity to sequentially confirm the practical problems the company currently faces, such as the delisting crisis, sluggish management, and the absence of shareholder returns.

◆ Governance Structure and Financial Status According to the report, Geumyang's largest shareholder is Chairman Ryu Kwang-ji, holding a 26.55% stake, while minority shareholders hold 72.31%. Its main businesses include foam blowing agents and secondary battery businesses.

The financial status showed continued deficits. On a consolidated basis, sales recorded 102.781 billion won, but it reported an operating loss of 44.661 billion won and a net loss for the period of 69.042 billion won. Total assets stand at around 1.222 trillion won.

◆ Governance Compliance and General Meeting Operations The compliance rate for core governance indicators was only 33.3%. The company failed to meet many of the major governance recommendations set forth by the Korea Exchange. Specific non-compliance items pointed out include: ▲ Failure to announce the convocation of the general meeting four weeks in advance ▲ Failure to notify dividend policy ▲ Absence of a CEO succession policy ▲ Inadequate risk management policy ▲ Non-adoption of cumulative voting ▲ Absence of female directors ▲ The CEO concurrently serving as the chairman of the board.

Regarding the operation of the general shareholders' meeting, it is positively evaluated that the regular meeting was held on a non-peak day and the electronic voting system was introduced. However, the recommendation to announce four weeks prior to the meeting was not followed, citing reasons such as the consolidated closing schedule.

◆ Absence of Shareholder Returns and Communication Conservative behavior stands out in the area of shareholder returns. Geumyang has not established a separate mid-to-long-term dividend policy, nor does it provide regular dividend policy guidance or English dividend policy materials to shareholders. No cash dividends were paid during the disclosure period, and with no cash or stock dividends in the last three fiscal years, the dividend payout ratio was 0%. The company cited a lack of earnings available for dividends and investments in new businesses as the reasons.

Geumyang explained that it will consider dividends once the operation of its secondary battery plant and overseas resource development business stabilize. However, this is the company's explanation regarding future plans, and whether it will actually materialize may vary depending on business performance and financial conditions. Regarding communication with shareholders, it was confirmed that no separate meetings or events for minority shareholders were held, and responses were made only through the website bulletin board, phone, and email inquiries.

◆ Delisting Response and Sanctions Status In the main body of the report, the company also expressed its position on its current situation. Regarding the recent delisting decision by the Korea Exchange, Geumyang stated that it considers restoring investor trust its top priority and is undergoing legal procedures, such as applying for an injunction to suspend the effect of the delisting decision. It has set maintaining its listing status and normalizing management as the core tasks of its governance policy. (However, this is the company's position, and whether the listing will actually be maintained will be determined by future court rulings and exchange procedures.)

Additionally, the details of sanctions due to disclosure violations were revealed. Regarding the cancellation of the decision for a paid-in capital increase, Geumyang was designated as an unfair disclosure corporation by the Korea Exchange in March 2025, resulting in a penalty of 7 demerit points and a disclosure violation fine of 70 million won. The company proposed measures to prevent recurrence, such as revising disclosure management regulations, improving internal processes, and strengthening internal training.

This corporate governance report clearly shows that Geumyang is currently in a deficit, responding to a delisting decision, and has been unable to pay dividends in recent years. The company plans to pursue management normalization in the future through its secondary battery business and overseas resource development, but future performance and whether it will maintain its listing are matters to be confirmed through objective results.

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